Do security analysts speak in two tongues?:
Why do analysts display overoptimism about the stocks they cover? According to the selection hypothesis, analysts pick their favorite stocks and are truly too optimistic. According to the conflict-of-interest hypothesis, analysts distort their view to maximize profits via commissions and underwritin...
Gespeichert in:
| Beteiligte Personen: | , |
|---|---|
| Format: | Buch |
| Sprache: | Englisch |
| Veröffentlicht: |
Cambridge, Mass.
National Bureau of Economic Research
2007
|
| Schriftenreihe: | Working paper series / National Bureau of Economic Research
13124 |
| Links: | http://papers.nber.org/papers/w13124.pdf |
| Zusammenfassung: | Why do analysts display overoptimism about the stocks they cover? According to the selection hypothesis, analysts pick their favorite stocks and are truly too optimistic. According to the conflict-of-interest hypothesis, analysts distort their view to maximize profits via commissions and underwriting business, in particular if affiliated with an underwriting bank. We analyze the concurrent issuance of recommendations and earnings forecasts to assess the relative importance of both explanations for affiliated and for unaffiliated analysts. First, we show that recommendations and forecasts reach different audiences. Small traders follow recommendations but not forecast updates; large traders discount recommendations and follow earnings forecasts. As a result, analysts may choose to distort recommendations but prove their analyst quality in their forecasts. The selection hypothesis implies, instead, a positive correlation between recommendation and forecast overoptimism. We find that, while affiliated analysts issue more optimistic recommendations than unaffiliated analysts, their earnings forecasts are more pessimistic. Moreover, forecast optimism is negatively correlated with recommendation optimism for affiliated analysts but positively for unaffiliated analysts. Similar discrepancies between the timing of recommendations and forecasts confirm that active distortion is a major explanation for the recommendation optimism of affiliated analysts. |
| Beschreibung: | Literaturverz. S. 29 - 30 |
| Umfang: | 30, [18] S. 22 cm |
Internformat
MARC
| LEADER | 00000nam a2200000zcb4500 | ||
|---|---|---|---|
| 001 | BV023593034 | ||
| 003 | DE-604 | ||
| 005 | 20080327000000.0 | ||
| 007 | t| | ||
| 008 | 070907s2007 xxu |||| 00||| eng d | ||
| 035 | |a (OCoLC)255499963 | ||
| 035 | |a (DE-599)GBV538039922 | ||
| 040 | |a DE-604 |b ger | ||
| 041 | 0 | |a eng | |
| 044 | |a xxu |c XD-US | ||
| 049 | |a DE-521 | ||
| 050 | 0 | |a HB1 | |
| 100 | 1 | |a Malmendier, Ulrike |d 1973- |e Verfasser |0 (DE-588)123423619 |4 aut | |
| 245 | 1 | 0 | |a Do security analysts speak in two tongues? |c Ulrike Malmendier ; Devin Shanthikumar |
| 264 | 1 | |a Cambridge, Mass. |b National Bureau of Economic Research |c 2007 | |
| 300 | |a 30, [18] S. |c 22 cm | ||
| 336 | |b txt |2 rdacontent | ||
| 337 | |b n |2 rdamedia | ||
| 338 | |b nc |2 rdacarrier | ||
| 490 | 1 | |a Working paper series / National Bureau of Economic Research |v 13124 | |
| 500 | |a Literaturverz. S. 29 - 30 | ||
| 520 | 8 | |a Why do analysts display overoptimism about the stocks they cover? According to the selection hypothesis, analysts pick their favorite stocks and are truly too optimistic. According to the conflict-of-interest hypothesis, analysts distort their view to maximize profits via commissions and underwriting business, in particular if affiliated with an underwriting bank. We analyze the concurrent issuance of recommendations and earnings forecasts to assess the relative importance of both explanations for affiliated and for unaffiliated analysts. First, we show that recommendations and forecasts reach different audiences. Small traders follow recommendations but not forecast updates; large traders discount recommendations and follow earnings forecasts. As a result, analysts may choose to distort recommendations but prove their analyst quality in their forecasts. The selection hypothesis implies, instead, a positive correlation between recommendation and forecast overoptimism. We find that, while affiliated analysts issue more optimistic recommendations than unaffiliated analysts, their earnings forecasts are more pessimistic. Moreover, forecast optimism is negatively correlated with recommendation optimism for affiliated analysts but positively for unaffiliated analysts. Similar discrepancies between the timing of recommendations and forecasts confirm that active distortion is a major explanation for the recommendation optimism of affiliated analysts. | |
| 700 | 1 | |a Shanthikumar, Devin |e Verfasser |0 (DE-588)133432092 |4 aut | |
| 776 | 0 | 8 | |i Erscheint auch als |n Online-Ausgabe |
| 810 | 2 | |a National Bureau of Economic Research <Cambridge, Mass.> |t NBER working paper series |v 13124 |w (DE-604)BV002801238 |9 13124 | |
| 856 | 4 | 1 | |u http://papers.nber.org/papers/w13124.pdf |z kostenfrei |3 Volltext |
| 943 | 1 | |a oai:aleph.bib-bvb.de:BVB01-016908364 | |
Datensatz im Suchindex
| _version_ | 1818965835703648256 |
|---|---|
| any_adam_object | |
| author | Malmendier, Ulrike 1973- Shanthikumar, Devin |
| author_GND | (DE-588)123423619 (DE-588)133432092 |
| author_facet | Malmendier, Ulrike 1973- Shanthikumar, Devin |
| author_role | aut aut |
| author_sort | Malmendier, Ulrike 1973- |
| author_variant | u m um d s ds |
| building | Verbundindex |
| bvnumber | BV023593034 |
| callnumber-first | H - Social Science |
| callnumber-label | HB1 |
| callnumber-raw | HB1 |
| callnumber-search | HB1 |
| callnumber-sort | HB 11 |
| callnumber-subject | HB - Economic Theory and Demography |
| ctrlnum | (OCoLC)255499963 (DE-599)GBV538039922 |
| format | Book |
| fullrecord | <?xml version="1.0" encoding="UTF-8"?><collection xmlns="http://www.loc.gov/MARC21/slim"><record><leader>02730nam a2200349zcb4500</leader><controlfield tag="001">BV023593034</controlfield><controlfield tag="003">DE-604</controlfield><controlfield tag="005">20080327000000.0</controlfield><controlfield tag="007">t|</controlfield><controlfield tag="008">070907s2007 xxu |||| 00||| eng d</controlfield><datafield tag="035" ind1=" " ind2=" "><subfield code="a">(OCoLC)255499963</subfield></datafield><datafield tag="035" ind1=" " ind2=" "><subfield code="a">(DE-599)GBV538039922</subfield></datafield><datafield tag="040" ind1=" " ind2=" "><subfield code="a">DE-604</subfield><subfield code="b">ger</subfield></datafield><datafield tag="041" ind1="0" ind2=" "><subfield code="a">eng</subfield></datafield><datafield tag="044" ind1=" " ind2=" "><subfield code="a">xxu</subfield><subfield code="c">XD-US</subfield></datafield><datafield tag="049" ind1=" " ind2=" "><subfield code="a">DE-521</subfield></datafield><datafield tag="050" ind1=" " ind2="0"><subfield code="a">HB1</subfield></datafield><datafield tag="100" ind1="1" ind2=" "><subfield code="a">Malmendier, Ulrike</subfield><subfield code="d">1973-</subfield><subfield code="e">Verfasser</subfield><subfield code="0">(DE-588)123423619</subfield><subfield code="4">aut</subfield></datafield><datafield tag="245" ind1="1" ind2="0"><subfield code="a">Do security analysts speak in two tongues?</subfield><subfield code="c">Ulrike Malmendier ; Devin Shanthikumar</subfield></datafield><datafield tag="264" ind1=" " ind2="1"><subfield code="a">Cambridge, Mass.</subfield><subfield code="b">National Bureau of Economic Research</subfield><subfield code="c">2007</subfield></datafield><datafield tag="300" ind1=" " ind2=" "><subfield code="a">30, [18] S.</subfield><subfield code="c">22 cm</subfield></datafield><datafield tag="336" ind1=" " ind2=" "><subfield code="b">txt</subfield><subfield code="2">rdacontent</subfield></datafield><datafield tag="337" ind1=" " ind2=" "><subfield code="b">n</subfield><subfield code="2">rdamedia</subfield></datafield><datafield tag="338" ind1=" " ind2=" "><subfield code="b">nc</subfield><subfield code="2">rdacarrier</subfield></datafield><datafield tag="490" ind1="1" ind2=" "><subfield code="a">Working paper series / National Bureau of Economic Research</subfield><subfield code="v">13124</subfield></datafield><datafield tag="500" ind1=" " ind2=" "><subfield code="a">Literaturverz. S. 29 - 30</subfield></datafield><datafield tag="520" ind1="8" ind2=" "><subfield code="a">Why do analysts display overoptimism about the stocks they cover? According to the selection hypothesis, analysts pick their favorite stocks and are truly too optimistic. According to the conflict-of-interest hypothesis, analysts distort their view to maximize profits via commissions and underwriting business, in particular if affiliated with an underwriting bank. We analyze the concurrent issuance of recommendations and earnings forecasts to assess the relative importance of both explanations for affiliated and for unaffiliated analysts. First, we show that recommendations and forecasts reach different audiences. Small traders follow recommendations but not forecast updates; large traders discount recommendations and follow earnings forecasts. As a result, analysts may choose to distort recommendations but prove their analyst quality in their forecasts. The selection hypothesis implies, instead, a positive correlation between recommendation and forecast overoptimism. We find that, while affiliated analysts issue more optimistic recommendations than unaffiliated analysts, their earnings forecasts are more pessimistic. Moreover, forecast optimism is negatively correlated with recommendation optimism for affiliated analysts but positively for unaffiliated analysts. Similar discrepancies between the timing of recommendations and forecasts confirm that active distortion is a major explanation for the recommendation optimism of affiliated analysts.</subfield></datafield><datafield tag="700" ind1="1" ind2=" "><subfield code="a">Shanthikumar, Devin</subfield><subfield code="e">Verfasser</subfield><subfield code="0">(DE-588)133432092</subfield><subfield code="4">aut</subfield></datafield><datafield tag="776" ind1="0" ind2="8"><subfield code="i">Erscheint auch als</subfield><subfield code="n">Online-Ausgabe</subfield></datafield><datafield tag="810" ind1="2" ind2=" "><subfield code="a">National Bureau of Economic Research <Cambridge, Mass.></subfield><subfield code="t">NBER working paper series</subfield><subfield code="v">13124</subfield><subfield code="w">(DE-604)BV002801238</subfield><subfield code="9">13124</subfield></datafield><datafield tag="856" ind1="4" ind2="1"><subfield code="u">http://papers.nber.org/papers/w13124.pdf</subfield><subfield code="z">kostenfrei</subfield><subfield code="3">Volltext</subfield></datafield><datafield tag="943" ind1="1" ind2=" "><subfield code="a">oai:aleph.bib-bvb.de:BVB01-016908364</subfield></datafield></record></collection> |
| id | DE-604.BV023593034 |
| illustrated | Not Illustrated |
| indexdate | 2024-12-20T13:23:19Z |
| institution | BVB |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-016908364 |
| oclc_num | 255499963 |
| open_access_boolean | 1 |
| owner | DE-521 |
| owner_facet | DE-521 |
| physical | 30, [18] S. 22 cm |
| publishDate | 2007 |
| publishDateSearch | 2007 |
| publishDateSort | 2007 |
| publisher | National Bureau of Economic Research |
| record_format | marc |
| series2 | Working paper series / National Bureau of Economic Research |
| spelling | Malmendier, Ulrike 1973- Verfasser (DE-588)123423619 aut Do security analysts speak in two tongues? Ulrike Malmendier ; Devin Shanthikumar Cambridge, Mass. National Bureau of Economic Research 2007 30, [18] S. 22 cm txt rdacontent n rdamedia nc rdacarrier Working paper series / National Bureau of Economic Research 13124 Literaturverz. S. 29 - 30 Why do analysts display overoptimism about the stocks they cover? According to the selection hypothesis, analysts pick their favorite stocks and are truly too optimistic. According to the conflict-of-interest hypothesis, analysts distort their view to maximize profits via commissions and underwriting business, in particular if affiliated with an underwriting bank. We analyze the concurrent issuance of recommendations and earnings forecasts to assess the relative importance of both explanations for affiliated and for unaffiliated analysts. First, we show that recommendations and forecasts reach different audiences. Small traders follow recommendations but not forecast updates; large traders discount recommendations and follow earnings forecasts. As a result, analysts may choose to distort recommendations but prove their analyst quality in their forecasts. The selection hypothesis implies, instead, a positive correlation between recommendation and forecast overoptimism. We find that, while affiliated analysts issue more optimistic recommendations than unaffiliated analysts, their earnings forecasts are more pessimistic. Moreover, forecast optimism is negatively correlated with recommendation optimism for affiliated analysts but positively for unaffiliated analysts. Similar discrepancies between the timing of recommendations and forecasts confirm that active distortion is a major explanation for the recommendation optimism of affiliated analysts. Shanthikumar, Devin Verfasser (DE-588)133432092 aut Erscheint auch als Online-Ausgabe National Bureau of Economic Research <Cambridge, Mass.> NBER working paper series 13124 (DE-604)BV002801238 13124 http://papers.nber.org/papers/w13124.pdf kostenfrei Volltext |
| spellingShingle | Malmendier, Ulrike 1973- Shanthikumar, Devin Do security analysts speak in two tongues? |
| title | Do security analysts speak in two tongues? |
| title_auth | Do security analysts speak in two tongues? |
| title_exact_search | Do security analysts speak in two tongues? |
| title_full | Do security analysts speak in two tongues? Ulrike Malmendier ; Devin Shanthikumar |
| title_fullStr | Do security analysts speak in two tongues? Ulrike Malmendier ; Devin Shanthikumar |
| title_full_unstemmed | Do security analysts speak in two tongues? Ulrike Malmendier ; Devin Shanthikumar |
| title_short | Do security analysts speak in two tongues? |
| title_sort | do security analysts speak in two tongues |
| url | http://papers.nber.org/papers/w13124.pdf |
| volume_link | (DE-604)BV002801238 |
| work_keys_str_mv | AT malmendierulrike dosecurityanalystsspeakintwotongues AT shanthikumardevin dosecurityanalystsspeakintwotongues |